While our stock market continues to lag the tech-heavy US, some individual UK shares have been experiencing great momentum in recent months.
Today, I’m picking out three examples and asking whether there’s still time for me to get involved.
Priced in?
Independent book producer Bloomsbury Publishing (LSE: BMY) has been in solid form of late. The shares have climbed 27% in the last six months alone.
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The performance is only slightly less stellar in the last year (+17%) but it’s still enough to put the FTSE 100 and FTSE 250 to shame (both up around 5%).
Not that this popularity comes as a surprise. In its February trading update, the Harry Potter publisher said that full-year revenue and pre-tax profit would now be “significantly ahead of upgraded market expectations“.
At least some of that is down to readers clamouring for the latest Sarah J Mass novel. One concern with this — and with all popular authors — is that sales may have peaked for a while. And with the shares now changing hands for almost 17 times forecast earnings, Bloomsbury is clearly not the bargain it once was.
I definitely still like the stock. However, I wonder if the risk/reward trade-off becomes unfavourable if the cost-of-living crisis abates and consumers start prioritising more expensive treats.
Getting frothy
When I last ran the rule over shipping services provider Clarkson (LSE: CKN) in June 2023, I believed it would remain a great source of rising dividends. What I didn’t see coming were the share price gains it would soon deliver to holders.
In the last six months, the stock has rocketed nearly 41% (23% in 12 months) due to the company performing ahead of analyst expectations. March’s full-year results revealed adjusted pre-tax profit of £109.2m compared to estimates of £108.2m.
Now boasting a forward price-to-earnings (P/E) ratio of 15, Clarkson doesn’t look expensive initially. However, it’s a fairly rich valuation for the Industrials sector. So, have I missed the boat?
Well no one can say for sure. However, knowing that we’re getting close to a new record high makes me nervous given that earnings per share are predicted to stagnate this year and next.
Still, the income stream looks as solid as ever, even if the size of the forecast yield (2.7%) is average.
More upside ahead
One final stock to highlight is CMC Markets (LSE: CMCX).
Of the three businesses mentioned here, the online trading platform has performed the strongest since the beginning of 2024. Indeed, a rise of nearly 60% shows how lucrative it can be to invest in minnows.
Notwithstanding this, the company has massively lagged the market over the last 12 months — a great reminder that investing in small-cap stocks can also be a stomach-churning ride.
The recent purple patch has been triggered by a recovery in client activity and cost-cutting measures. These include shedding 17% of its global workforce (roughly 200 positions).
At only 11 times forecast earnings, I think there could be even more upside ahead. Forthcoming elections in the UK and US could get traders fearful and greedy in equal measure – just the sort of conditions CMC wants.
So, if I could only buy one of the above today, it would be this one.
